The objective for every organisation should be to establish an anti-fraud culture covering working practices and business ethics culminating in formally documented procedures.
This formal fraud policy statement indicates that the fight against fraud is endorsed and supported at the most senior level within our business. SEVERUS FINANCE (PTY) LTD (“SEVERUS”, “we”, “us”, “our”) wishes to ensure all employees are aware of a zero-tolerance attitude to criminal breaches of business practices which may be reported to the police. The fraud policy statement is applicable to all employees, contractors and suppliers (collectively “SEVERUS”). The purpose of this fraud statement is to reaffirm the mission of SEVERUS to:
- – take appropriate measures to deter fraud;
- – introduce/maintain necessary procedures to detect fraud;
- – investigate all instances of suspected fraud;
- – report all suspected fraud to the appropriate authorities;
- – assist the police in the investigation and prosecution of suspected fraudsters;
- – recover wrongfully obtained assets from fraudsters; and
- – encourage employees to report any suspicion of fraud.
- 1. SEVERUS has a commitment to high legal, ethical and moral standards. All members of staff are expected to share this commitment. This policy is established to facilitate the development of procedures, which will aid in the investigation of fraud and related offences.
- 2. The management of SEVERUS already has procedures in place that reduce the likelihood of fraud occurring. These include standing orders, documented procedures and documented systems of internal control and risk assessment. In addition, the Management of SEVERUS tries to ensure that a risk (and fraud) awareness culture exists in this organisation.
- 3. This document, together with the Fraud Management Process, is intended to provide direction and help to those officers and directors who find themselves having to deal with suspected cases of theft, fraud or corruption. These documents give a framework for a response and advice and information on various aspects and implications of an investigation. These documents are not intended to provide direction on prevention of fraud.
- 4. To develop an anti-fraud culture and define management and employee responsibilities in this area.
- 5. To reduce the opportunity for fraud by introducing preventative and detective measures into systems and processes.
- 6. To ensure that anti-fraud controls are considered and built into new systems and processes at the design stage.
- 7. To promote an open and ethical culture within the organisation which deems unethical behaviour unacceptable.
- 8. To increase the vigilance of management and staff through raising fraud risk awareness.
- 9. To ensure that the directors meet their statutory responsibilities towards fraud, as per governing legislation.
- 10. To learn from previous incidents and recycle lessons and experiences in fraud prevention and detection globally.
- 11. To encourage management and staff to report their suspicions while guaranteeing anonymity where requested.
- 12. To investigate impartially and thoroughly all cases or suspected cases of fraud, to prosecute offenders and, where appropriate, to seek to recover monies and costs through legal means.
- 13. To co-operate with other organisations, such as other financial services companies and the police, in the industry-wide detection and prevention of fraud.
- 14. Fraud risk can best be managed through preventative and detective control measures. SEVERUS is committed to the continuous improvement of fraud prevention and detection techniques.
- 15. Management has a responsibility to ensure adequate anti-fraud measures and controls are present in systems. However, all staff are equally expected to be vigilant and play an active part in anti-fraud activity.
- 16. The overt investigation of all actual or suspected instances of fraud and the prosecution of offenders provides an effective deterrent. Therefore, all known or suspected incidences of fraud will be thoroughly and impartially investigated.
- 17 The investigation of fraud involving employees is best conducted independently – ie, outside the control of the line management of the area in which the investigation will take place.
- 18. This policy applies to any irregularity, or suspected irregularity, involving employees as well as consultants, vendors, contractors, and/or any other parties with a business relationship with us. Any investigative activity required will be conducted without regard to any person’s relationship to this organisation, position or length of service.
Actions Constituting Fraud
- 19. Fraud comprises both the use of deception to obtain an unjust or illegal financial advantage and intentional misrepresentations affecting the financial statements by one or more individuals among management, staff or third parties.
- 20. All Managers and Supervisors have a duty to familiarise themselves with the types of improprieties that might be expected to occur within their areas of responsibility and to be alert for any indications or irregularity.
THE MANAGEMENT’S POLICY
- 21. The Management of SEVERUS is absolutely committed to maintaining an honest, open and well-intentioned atmosphere within the organisation. It is therefore also committed to the elimination of any fraud within the organisation, and to the rigorous investigation of any such cases.
- 22. The Management of SEVERUS wishes to encourage anyone having reasonable suspicions of fraud to report them. Therefore, it is also the Management’s policy, which will be rigorously enforced, that no employee will suffer in any way as a result of reporting reasonably held suspicions
- 23. All members of staff can therefore be confident that they will not suffer in any way as a result of reporting reasonably held suspicions of fraud. For these purposes reasonably held “suspicions” shall mean any suspicions other than those, which are raised maliciously and found to be groundless. The organisation will deal with all occurrences in accordance with the Public Interest Disclosure Act.
- 24. The organisation requires all staff at all times to act honesty and with integrity and to safeguard the resources for which they are responsible. Fraud is an ever-present threat to these resources and hence must he a concern to all members of staff. The purpose of this statement is to set out your responsibilities with regard to the prevention of fraud.
WHAT IS FRAUD?
- 25. No precise legal definition of fraud exists; many of the offences referred to as fraud are covered by:
- – Prevention of Organised Crime Act (No. 121 of 1998) (POCA).
- – Financial Intelligence Centre Act (No. 38 of 2001) (FICA).
- – Public Finance Management Act (No. 1 of 1999).
- – Protected Disclosures Act (No. 26 of 2000) (Whistleblower Act).
- – Companies Act (No. 71 of 2008).
- – Prevention and Combating of Corrupt Activities Act (No. 12 of 2004) (PRECCA).
- – Local Government: Municipal Finance Management Act (No. 53 of 2003).
- – Banks Act (No. 94 of 1990).
- – Inspection of Financial Institutions Act (No. 80 of 1998).
- – Mutual Banks Act (No. 124 of 1993).
- – Co-operative Banks Act (No. 40 of 2007).
- 26. The term is used to describe such acts as theft, deception, bribery, forgery, corruption, false accounting and conspiracy to commit these offences. For practical purposes fraud may be defined as the use of deception with the intention of obtaining an advantage, avoiding an obligation or causing loss to another party.
- 27. The board should be responsible for:
- – Developing and maintaining effective controls to prevent fraud.
- – Carrying out vigorous and prompt investigations if fraud occurs.
- – Taking appropriate legal and/or disciplinary action against perpetrators of fraud.
- – Taking disciplinary action against supervisors where supervisory failures have contributed to the commission of the fraud.
- 28. Managers should be responsible for:
- – Identifying the risks to which systems and procedures are exposed.
- – Developing and maintaining effective controls to prevent and detect fraud.
- – Ensuring that controls are being complied with.
- 29. Individual Members of staff are responsible for:
- – Acting with due care, skill and diligence in the use of official resources and in the handling and use of corporate funds whether they are involved with cash or payments systems, receipts or dealing with contractors or suppliers
- – Reporting details immediately to (their line manager or next most senior manager) if they suspect that a fraud has been committed or see any suspicious acts or events.
CORPORATE PRINCIPLES & PRACTICE
Fraud Prevention and Detection
- 30. HR policies include reference to recruitment and screening of new staff, an effective appraisal system and exit interviews.
- 31. Fraud risk will be assessed regularly as part of the business’s risk management process, and at the design stage of new systems and processes. Cost-effective controls will be introduced where appropriate.
- 32. Fraud risk awareness training will be undertaken with staff in high-risk functions on a regular basis.
- 33. Regular assurance will be completed on key controls to ensure their effective mitigation of the fraud risk.
- 34. Data mining and data analysis will be used to proactively manage the fraud risk and identify actual and potential problems.
- 35. Fraud contingency plans will be developed to ensure appropriate and timely action is taken if fraud is suspected or uncovered.
- 36. Where reasonable suspicion that fraud against SEVERUS has taken place, the Company is entitled to investigate the matter thoroughly using recognised and legitimate investigative techniques.
- 37. All investigations will be carried out objectively and confidentially, and independently of the line management for the area in which the fraud has occurred or is suspected.
- 38. In the normal course of events we would look to hand over the investigation to the police, or other authorities, as soon as practical.
- 39. In certain cases, third-party investigators may be employed in order to gather sufficient evidence to hand the case over to the proper authorities. Responsibility for the management of third parties rests with the director responsible for fraud & investigations, who must take steps to ensure the investigation is conducted in an appropriate manner.
- 40. The directors of SEVERUS are authorised to enter any of our premises, be given access to any information requested, and have access to all staff (with reasonable notice).
- 41. The rights of individuals will be respected at all times.
- 42. Where members of staff are involved in a fraud against the group, whether actual or attempted, they will be subject to the group’s disciplinary procedures, which may result in dismissal from SEVERUS.
- 43. We will seek to prosecute anyone who commits fraud and will seek to recover its assets through legal means.
- 44. Lessons learnt will be shared across the group as soon as possible after an investigation is concluded.
- 45. It is our policy to report all known criminal activity to the police for investigation by them. The timing of police involvement will be at the discretion of the director of fraud & investigations, in conjunction with the appropriate line and group directors.
- 46. Similarly, the Company will report other breaches discovered in the course of investigations to the relevant authorities. The timing of such involvement will be at the discretion of the director of fraud and investigations, in conjunction with the appropriate line and group directors